CME - CME Group Inc.

Operator : Welcome to the CME Group second quarter 2026 earnings call. At this time, I would like to inform all participants that your lines have been placed on a listen-only mode until the question answer session of today's conference. I will now turn the call over to Adam Minick. Please go ahead. Adam Minick : Good morning. I hope you're all doing well today. Earlier this morning, we released our earnings commentary, which provides extensive details on the second quarter of 2026, which we will be discussing on this call. I'll start with the safe harbor language. I'll turn it over to Terry. Statements made on this call and in the other reference documents on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statement. Detailed information about factors that may affect our performance can be found in the filings with the SEC, which are on our website. Lastly, in the earnings release, you will see a reconciliation between GAAP and non-GAAP measures following the financial statements. With that, I'll turn the call over to our Chairman and CEO, Terry Duffy. Terry Duffy : Thank you, Adam. Thank you all for joining us this morning. I'll make a few comments about our strong quarter before I turn it over to Lynn to provide an overview of our financial results. In addition to Lynn, we have other members of our management team present to answer questions after the prepared remarks. The second quarter average daily volume of 29.8 million contracts represented the second highest Q2 in our history and was within 1% of our record second quarter a year ago, with May and June particularly strong following the tough April comparison. Open interest ended the quarter up 8% over the past year and up 16% since the beginning of this year. Additionally, we delivered a record level of capital efficiencies, saving our customers an average of over $95 billion in margin per day. Recently, this strong business performance has been overshadowed by discussions surrounding perpetual futures. While this product may be dubbed futures, they function much more like leverage spot products. They may appeal to certain retail traders seeking high leverage, but they are not appropriate for the institutional risk managers who comprise the vast majority of our business. Perpetual futures are highly engineered instruments that rely on frequent funding rate adjustments that revert the position back to the spot price. They are known for high leverage and automated liquidations. They offer limited investor protections and introduce heightened market risk, particularly for retail participants. These products do not appeal to our core customers. Through the first half of 2026, 94% of our volume originated from institutional customers. Perpetual futures are in no way substitutes for the institutional hedging tools that these customers rely on. Perpetuals do not provide price or time certainty, two necessary components for hedging exposures. Furthermore, when taking into account both of the transaction fee and the daily funding cost, the total cost to trade perpetual futures is typically orders of magnitude more expensive than our highly efficient futures contracts. We have the full technical and operational capabilities to launch perpetual futures. In fact, we have contract specifications and are prepared to bring these products to market should evolving demand or structural shifts make it appropriate to do so. However, we have not heard demand from our customers for these products. Crypto perpetuals are not new and existed before we even launched our crypto futures complex in 2017. We have built that business over the last nine years because our futures fill a market need that was not met by traditional crypto products, including perpetuals. Our crypto futures volume is up over sevenfold in the past three years, despite the existence of crypto perpetuals. We remain deeply committed to ensuring market integrity, and we'll never sacrifice core protections in the name of innovation. Instead, we continue to launch innovative products while preserving the safety and soundness of our marketplace. In the second quarter, we successfully introduced twenty-four seven trading of crypto futures. This weekend we are launching twenty-four seven trading of our one-ounce gold contract. Next week, we will be launching Single Stock futures, which will simplify directional trading with exceptional capital efficiency. In the fourth quarter, we plan to launch Treasury Link to link our U.S. Treasury futures and cash treasury liquidity pools. We're also partnering with Silicon Data to launch a pioneering Compute Futures market later this year. We expect our innovative new offerings to further accelerate our growth as we build on our record-breaking performance in the first half of 2026. Our robust product pipeline and ongoing investments in our technology evolution position us well to drive continued value for both clients and shareholders. With that, I will turn the call over to Lynne to review our financials. I look forward to your questions. Lynne Fitzpatrick : Thanks, Terry, and thank you all for joining us this morning. As Terry mentioned, CME Group delivered strong financial results in the second quarter. Our revenue of over $1.7 billion was up 1% from the second quarter in 2025. This marks a record for second quarter revenue and the second highest all-time quarterly revenue behind Q1 of this year. The average rate per contract for the quarter was $0.678, a $0.026 increase from Q1. Market data revenue achieved another record quarter, up 20% to $238 million, continuing our trend of 33 consecutive quarters of year-over-year market data revenue growth and our eighth consecutive quarter of record revenue. Adjusted expenses were $521 million for the quarter and $412 million, excluding license fees. Our adjusted operating income was $1.2 billion, or 69.5% adjusted operating margin. Adjusted net income and adjusted diluted earnings per share were $1.1 billion and $2.99 per share, 1% higher than Q2 2025. This represents an adjusted net income margin for the quarter of 63.4%. We returned $1.2 billion to shareholders during the quarter, with $468 million in regular quarterly dividends and $695 million in shares repurchased. CME Group continued to build on its record 2025 performance through the first half of 2026. Volume through the first half was 10% ahead of last year, with open interest growing 8%. Revenue increased 8%, and adjusted diluted earnings per share climbed 10% in the first half of the year. Further, we set new records for our large open interest holders in interest rates, equity index, and FX since the start of this year. Third quarter volumes have started out strong, with July to date tracking 18% ahead of last year. Our strong financial performance this year reflects CME Group's established role as the world's premier risk management destination. Amid times of uncertainty, our robust market infrastructure and deep liquidity pools allow participants to manage exposure with confidence. As the market landscape continues to evolve, we remain committed to driving innovation and delivering the capital efficiencies our clients rely on. With continued strong demand for our risk management products, we look forward to continuing this momentum in the second half. We'd now like to open up the call for your questions. Thank you. Operator : The phone lines are now open for questions. If you would like to ask a question over the phone, please press *1 and record your name. To withdraw your question, press *2. The first question in the queue is from Dan Fannon with Jefferies. Your line is open. Dan Fannon : Thanks. Good morning. Terry, I was hoping you could expand upon your comments on perpetuals. Clearly, the market is focused on this topic. Can you expand upon what you're hearing from customers, if anything, around the potential innovation that might be coming from perpetuals? Terry Duffy : Dan, it's a great question. I've spent a lot of time over the last several weeks going to each and every one of our asset classes, talking to the highest levels of those institutions who participate in our business. One of the great benefits of being in my role for the last 30 years is I've built a lot of good relationships, and they've put me in the right direction with the participants. I'll give you an example. The second largest energy participant in the world of commercial participation. There's been a lot of talk about oil as it relates to perps and other, and of course, it's in the headlines today as it relates to the Iranian war. I have had conversations with the CEO of this firm and his derivative participants from different parts of the world, and they reassured me 19 times because I asked them if they wanted me to list this product. They do not want this product. They do not know how they would possibly risk manage the exposures that they have on their books on it with a perpetual contract. It does not work for them. They made it quite clear to me that this product that we have today and other energy products that are available to them, whether it's at ICE or somewhere else, are critically important to what they do to manage their business. That is one example, and I've also done the same thing as it relates to our other products such as rates and equities, and have had very similar conversations. When these products have end dates associated with them on the cash market side, and you have a product, as I said in my opening comments, that trade around a leveraged spot price, that does absolutely nothing for them in order to risk manage their product. It might do something for the retail participant who wants to just trade back and forth, but it does nothing for the 94% of the business that I outlined earlier in my comments. I think anybody on this call knows me. I'm a pretty forward, straight shooter, and I even mentioned that in my opening comments, if I thought we needed to list these, we would do so. I said that we were prepared to do it if we needed to do it. That's not what we are hearing. We are hearing quite the contrary to how business and commerce gets done by the institutional participant. I want to be careful about the names that I use, but I will tell you that these are significant players. These are not 3-tier or 4-tier players. These are top-tier players who are the open interest in CME Group. Dan Fannon : Thank you. Terry Duffy : Thanks, Dan. Operator : The next question is from Alex Kramm with UBS. Your line is open. Alex Kramm : Yes. Hey, good morning, everyone. I guess I'll stay on the same topic, even though you've brought it up twice already, Terry, that if there's demand, you would meet it. Maybe just talk a little bit more philosophical why on the retail side you don't think there's demand yet, because clearly you've been expanding into retail aggressively, and I know that's not your core market, but it's been a nice growth area, and clearly it seems like there is interest from retail. Just maybe, can you give us some more detail what the retail participation is saying and why you're not ready, or why you're not willing to do this right now, and what really has to change for you to expand there on the retail side? Terry Duffy : The comparison, Alex, and thank you for the question. The comparison for the retail right now in the U.S. would be the crypto franchise because that's the only other perps that are out there competing with our products today. Tim's going to walk through some of the statistics around what the retail is doing in that particular asset class. I want to make a point, and I think this is really important as it relates to perpetuals. I want to ask anybody, or it's a rhetorical question, how many people have been talking about the funding rate and the cost of the funding rate as it relates to a perpetual? How many people have been talking about the auto liquidation risk management model on the back end of the market? The answer to that, because it was rhetorical, is zero. Only thing they're talking about a perpetual is there is no expiration date associated with it. I will tell you that we are not seeing anybody, nor do we hardly ever see anybody in the retail division hold onto these products long enough to ever go to an expiration. That is not the issue. I have clearly outlined, if they did, the cost associated with going to roll the product versus paying the funding rate and the cost to trade the product, which is sevenfold higher than CME's execution cost, would way overshadow the cost that it would be to roll your position. That demand is still not there. Just to reinforce that, I'm going to ask Tim to walk through an apples-to-apples comparison on the crypto side, because that's what we've seen to date that's been approved. Tim. Tim McCourt : Thanks, Terry, and thanks, Alex, for the question. As Terry said in his opening remarks, our cryptocurrency business at CME Group has continued to grow year-over-year, the nine years we've been in it, alongside the existence of perpetuals in the crypto-native ecosystem outside the U.S. When we look at the growth we had, if we look at the suite of crypto products at CME Group, that grew 32% compared to Q2 2025. Our suite of cryptocurrency futures and options is up 44% for H1 2026 versus H1 2025, and is up 76% in June versus June of 2025, despite the slightly more muted volatility environment we're seeing in crypto, and that is in place with perpetuals being introduced the last two weeks. As Terry said, if we look at some of the numbers, at CME Group, we're doing between $4.5 billion and $6.5 billion per day of trading in our cryptocurrency complex, versus about $270 million at the Bitcoin perp introduced by Kalshi in the month of July. If you look at open interest, again, which as Terry is saying, is a proxy for risk management and access to these markets, we have between $9 billion and $10 billion of average daily open interest for June and July versus $10 million of open interest in the perpetual product that was introduced at the end of May, beginning of June. I think these numbers speak for themselves and are a long almost nine-year growth trajectory of serving this community, along with the introduction of additional cryptocurrency futures, the introduction of 24 by 7 trading, where we've seen over $1.5 billion traded over the first eight weekends with a significant participation of retail. We think the retail community in cryptocurrency is adequately served alongside the institutional community of clients at CME Group. Terry Duffy : Thanks, Tim. Lynn, go ahead. Lynne Fitzpatrick : If I could just add one thing. Tim highlighted at the end the launch of the 24/7 crypto. We have those metals products also going live this weekend, and we've talked about the Single Stock futures going live as well. We continue to innovate our products and add what we are seeing as demand coming from that retail customer. We're certainly hearing interest in our products and continuing to expand our suite, both in terms of availability and product to meet that need. Terry Duffy : Alex, hopefully that gives you some more color about what we are really seeing versus what is being written about or potentially propaganda coming out of other entities of what they are, may or may not be doing. Alex Kramm : Very good. Thank you. Terry Duffy : Thank you. Operator : The next question is from Chris Allen with KBW. Line is open. Chris Allen : Yeah, morning, everyone. Thanks for the question. Maybe if we could switch gears a little bit and talk about Compute Futures. Seems like a really interesting product opportunity. Wonder if you could give us any color on customer demand here, and how do you think CME's product construction will be differentiated versus other competing launches? Terry Duffy : That's a great question, Chris, and thank you for that. This is the beauty of CME Group having the business partners with our FCMs and our clients and working together to bring product together to go forward and serve the interest of many, many participants. Compute Futures Whether you're a believer in AI or not, or whether you're a believer in the proliferation of data centers or not, some things have just become undeniable. I think this might be one of those scenarios, because the artificial intelligence serves so many different industries outside of finance and the benefits it could derive. You need to have the risk because you've seen some of these compute stocks or AI stocks, the volatility that can be inherent in them, the multiples they trade at. I think this will give them a massive risk management tool to use going forward. I am really excited by the growth of this product, and we're going to do it and do it properly with our partners. For me, I think this is another innovative concept idea as the world continues to evolve. We're reintroducing Single Stock futures, as we said in earlier comments. I'm probably the only one that's old enough to remember that when we first introduced them, the first time, they failed miserably. Sometimes timing is really important when you list products. I will say timing is massively critical right now when we get ready to list Compute Futures. Just as I do with Single Stock futures, the time is right for that product as well. I'm going to ask Derek Sammann, this falls under his business line a little bit, and ask him to make a comment as well. Derek? Derek Sammann : I think as Terry and Lynne both mentioned, we continue to innovate product based on client demand and client need, and those continue to evolve every single day, despite the headlines of what the flavor of the month is in retail. When we look at the Compute Futures specifically, there is certainly an unmet need in the world in which we operate, where data centers are front and center of driving economic growth, and AI is in the middle of every conversation right now. We are going to be the first daily benchmark tracking the spot hourly rental cost of NVIDIA H100 GPUs. What that means is that we're going to be partnering with Silicon Data as the price reporting agency, as Terry referenced, for these rental indices. What this means is it allows customers to be able to manage their risk in price certainty and price curves around the input cost to managing their data center business. It's going to provide a mechanism for financing for a lot of these companies. There's no real price discovery mechanism today. That's the business that we are in, whether it's ags, whether it's equities, whether it's energy. This falls right under our price discovery mechanism. It allows customers to manage their procurement planning process, which they can't do now with a forward curve, and allows for clear budgeting as well. When you think about who we think the users of these products are, it's not just the commercial end users, AI labs, cloud providers, asset managers looking to get exposure to growth drivers of the AI economy, banks, energy firms, hedge funds, and professional trading houses. When you take a step back, this actually nestles well inside our commodities portfolio, because if you think about what this allows us to do, this allows customers to effectively hedge a data center. Think about that for a minute. We've got our copper contract, we've got our aluminum contract, we've got our nat gas, which is typically the energy input into most data centers. We've got a power business, we've got Compute Futures. We think about what that portfolio product means to our commercial end users as well as asset managers and buy-side firms that are looking to get exposure. This is the next evolutionary step in product innovation that continues to expand our portfolio based on customer need and our ability to innovate in a rapidly changing environment. Terry Duffy : Ken, hopefully that gives you a little bit, or Chris, a little bit of color on the Compute Futures. Chris Allen : Thanks. Terry Duffy : Thank you, buddy. Operator : The next question in the queue is from Ken Worthington with J.P. Morgan. Your line is open. Ken Worthington : Hi, good morning. Thanks for taking the question. Trump has launched Project Vault in minerals and metals with copper, silver, aluminum, lithium, and some others on the list. Are there positive implications for COMEX from Project Vault or other Trump metals and mineral initiatives? Thanks. Terry Duffy : Thanks, Ken. Appreciate the question. Derek, you want to address that? Derek Sammann : Yeah. Ken, appreciate the question. There's certainly a lot of discussion around what it means for reinforcing U.S. physical supply chains. I think, let me take a step back. Project Vault is out in the market alongside a lot of other growth drivers that have led to our record first half revenues and volumes in our metals business and our second best second quarter ever in our metals business. When you look at what Project Vault is focused on, it's really about reinforcing U.S. supply chains. That means it's reinforcing the value of U.S. benchmark, which is exactly what CME Group is all about, whether it's our copper business, whether it's our battery metals business, where we are the single largest venue for risk management and price discovery in battery metals. This is contributing all to the focus on U.S. benchmarks, the products we run. If you follow that value, what's happening? We see our copper volumes up 4% this year. We've seen record amounts of physical copper in COMEX warehouses, just under 700,000 short tons of copper in U.S. warehouses, directly responding to the focus on U.S. supply chains and onshoring the ability for customers and U.S. infrastructure to enable access to this critical minerals and battery metal. That is exactly the business that we are in the middle of. We are the number one exchange for battery metals globally. This is bringing new interest into this part of the industry from buy-side and banks alongside commercials, which is the original driver for our entry into the battery metals business. The last data point I'd tell you is that we're seeing record open interest in our steel complex right now. That is directly tied to focus on U.S. supply chain. Overall, I think we're well-positioned for this. We continue to innovate in this space. As I mentioned before, we continue to respond to customer need. As those needs evolve, we'll continue to grow this business. Terry Duffy : Thanks, Derek. Ken Worthington : Thank you. Terry Duffy : Ken, thank you for the question. Operator : The next question in the queue is from Patrick Moley with Piper Sandler. Your line is open. Patrick Moley : Yes, good morning. Thanks for taking the question. Terry, earlier this month, the CFTC stayed your 24/7 crude oil contract the day before launch, while the 24/7 gold contract went forward, and Chairman Selig was fairly pointed about the self-certification timing. What do you make of the commission drawing a line between those two products? Do you see any read-through there on how they're maybe approaching the perpetual futures question and allowing 24/7 trading in those products potentially? Thanks. Terry Duffy : Yeah, thanks, Patrick. I appreciate the question. I think that when you look at the stay on our 40.2 is what Patrick is referring to. There's two ways to certify contracts, 40.2 is self-certification, 40.3 is a full review. We actually filed both, as everybody may know. The contract we filed was not novel or complex. It was an existing contract, just with a smaller size to it. We felt, we announced the date, the 40.2 was the right approach for us to do, which by law, we have the ability to file either one. We're not compelled to file a 40.3, or a 40.2, but we did file the two, both of them. My read on that is that they stayed the contract. I guess that's their priority to do so. I guess I don't want to get into too much of the idiosyncrasies of some of the products they have not stayed, but it is kind of interesting how some of the 40.2 filings that have gone through the agency, and I guess I can go through an example of the ridiculous and others, but let's just talk about the Fourth of July contract that they did not stay on a 40.2, which was Nathan's Hot Dog Eating Contest, that was actually a contract that went through, and I guess that had an economic interest to somebody. I'm not sure who, but 24/7 needed to be stayed on this existing contract. That to me is a little concerning about readily manipulable, susceptible to manipulation under Core Principle 3, which we have been very adamant about, of these contracts. We didn't see anything novel or complex as it relates to our small oil contract. We have talked to, as I said earlier in my comments, some of the largest producers in the commercial side of the energy. They understood what we were trying to effectuate. We have 24/7 oil being traded today by entities that are supposedly not allowed to have U.S. participants into it, but yet we've yet to see how the federal government is policing U.S. participants from not participating in these 24/7 markets or how they're not having an influence on the weekends. Certain markets, I'm not suggesting they are, but how they're not. We also have prediction markets that have prices of oil that trade 24/7. I was a little surprised by that, but I guess I shouldn't be because there's certain other contracts that take priority when you're in the hot dog business. There's a lot of things going on right now, Patrick, I'm surprised by it, and I'm not trying to be too flippant about it, but I am trying to point out that we are trying to run contracts here that are meaningful for commerce, that we think are critical for commerce. There are other participants that are listening to this, and we are being held up by the agency, but they are not telling us or the world how they are policing U.S. participants from not participating in 24/7 oil today, or how they can square up that predictions on oil prices for down the road that trade 24/7 are any different from our small contract. A little surprised by it, but not really. Patrick Moley : All right. Very helpful color. Thanks, Terry. Terry Duffy : Thanks, Patrick. Operator : Next question in the queue is from Brian Bedell with Deutsche Bank. Your line is open. Brian Bedell : Great. Thanks. Good morning, folks. Thanks for taking the question. Maybe just to switch back to perpetuals and really focusing on the retail side and maybe a futuristic scenario, and that would be, Terry, what would your view be on any potential down the road CFTC approval of equity perps, particularly S&P? What kind of process do you think that ought to go through given that market is many multiples the size of the crypto market and could have systemic issues? If you could talk about that and then, if you were to launch those, I would assume they would not be risk margined with your existing clearing house. They would be separate. Could you theoretically launch those for retail at lower leverage? Would you view yourself as having the exclusive right to the S&P license in a perp future, or I shouldn't say future, but a perp contract, which I guess is a CFTC-regulated swap, as opposed to a future? Terry Duffy : Brian, great question. A lot in there to unpack. Let me unpack it. First of all, your last comment was the right comment. We still believe, and our litigation will show that these are swaps, not futures. Anytime two parties exchange payments as like they do in the funding rate, under the Dodd-Frank Act, which I had the distinct pleasure of testifying 20 to 30 times on in 2010, long before anybody at the CFTC was up there I know what Dodd-Frank says. That is a swap contract. We feel very confident that that is a swap contract to start. Let's fast-forward, though. You asked another question. Would we list those contracts on equities, I believe, as you said, in a separate entity? No, we would not need to list them in a separate entity of clearing. We could list them in our existing clearing because it doesn't mean if you list a perp that you have to have an auto liquidation margin methodology in order to have a perpetual. We would not need to do that if, in fact, we went down that path. That's a long way from even having a discussion. Your third question was as it relates to our relationship with S&P Global. Anything that is considered a future and cleared by our agreement is the exclusive right under the index of CME Group. No one else could be able to list that contract. That is the intellectual property that is owned in partnership with S&P Global. We would be the only ones that could list a perpetual if we went down that path on equities, on the indices of the S&P, of the Dow Jones, and we have the agreements with Nasdaq and with Russell that they have the understanding that those are intellectual property products. If they're deemed futures, they fall under the scope of our agreement. We're the only ones that can participate in that particular asset class on the indices. I don't know if I touched on three of the four or all four. Brian Bedell : Just the systemic risk of potentially approving an equity perp, given that market equities are obviously massively larger than crypto Terry Duffy : Brian, I'm sorry, I don't mean to cut you off. The systemic risk of an equity perp, if you were to try to list an equity perp, the way they are designed today and listed today in crypto, I think it could be a systemic issue for the marketplace because no one understands full well how that funding rate would work and how it would be calculated, because as we said earlier, it's technically not a future, it's a spot leverage product. That right away has a problem for that particular asset class. Secondly, on the auto liquidation of a market the size of the U.S. equity, other equity markets and the participants thereof could be very systemically risky as they auto liquidate on a whole host of mathematical equations and how they liquidate those products. How much percent does each entity want to preserve to liquidate? What would happen in a cascading market up or down on liquidation on both sides of the market? Would they have to introduce tear ups as their first line of defense, not their last line of defense? That, to me, would be a systemic risk, not just to the participants, that would be a systemic risk to the U.S. equity market. If you have a systemic risk to the U.S. equity market, there's a systemic risk to the world. Brian Bedell : Yep. Very clear. Thank you. Terry Duffy : Thank you. Operator : Next question is from Alex Blostein with Goldman Sachs. Your line is now open. Alex Blostein : Hi, good morning. Thanks for taking the question. Terry, I was hoping to go back to the point you were making around Single Stock futures and the fact, obviously, that's been tried before. You think the time is sort of ripe now for these to be more successful. Why now? I guess, what makes it different? Maybe talk through how you're planning to partner with various retail distribution platforms to perhaps make this a more successful product now, and again, ultimately, competition from some of those platforms directly, to launch other forms of sort of leverage bets on underlying equities. Terry Duffy : Thanks, Alex. Interesting question. Why timing now? I've been around, like I said earlier, a long time, and I've seen a lot of products come and go. I like to tell people that when you've seen a lot of things, you've seen a lot of people make money being wrong, and you've seen a lot of people losing money being right, and it's all about timing. Right now, the world's evolved since 2000 when the Single Stock futures, OneChicago joint venture was put forward with three separate entities, with three separate agendas under two separate regulators, being the SEC and the CFTC. It was destined kind of for failure because of the timing and where we're at in the evolution of finance. That doesn't mean that the product is not a good concept or an idea for risk management protocols as we continue to evolve. It's not too dissimilar to where T-bills were dead forever, and all of a sudden, when rates started to do what they did, T-bills actually became in favor again throughout our process, and we relisted T-bills, and we did quite well with them. That can happen in different times in the world of economic finance. I think that Single Stock futures with the proliferation of the markets itself, I'm not suggesting the markets are going higher or lower, but when you see the appreciation in the equity markets today, I think people are now looking for other tools on how to hedge out that product, where they may not be looking at that with a valuation of the S&P 500, much lower as it was in 2000 or the Dow where it was at and the Russell and Nasdaq. Now with these different levels, I think people are looking at different tools in order to efficiently hedge certain stocks. You don't need to read the daily paper to know that people like to talk about the Mag Seven, the Mag Nine, whatever the Mag is of the day, what is in vogue. There's people that are looking to hedge out those risks. In a liquid marketplace where they feel comfortable doing so. We think CME is the right place for that. We think that the products that we're going to offer them will be the right products for them to mitigate and manage that risk. The reason why, Alex, I feel so compelled about it, is because at the participation levels, not only from the institutions, but for all the different cohorts, and the valuation of the indexes in of themselves, need to have tools to manage risk, and this is just another tool for them to do so, and we think it's efficient. You asked another question, which I'm going to ask Tim, and then Julie Winkler on the retail partner side, or the partner side in general, how we're going to move that forward. Tim, do you want to make a comment? Or did I touch on- Tim McCourt : Sure. Yeah. Thanks, Terry, and thanks, Alex, for the question. I think also when we look at the timing of introducing Single Stock futures at CME Group next Monday, is if we look at the momentum we're seeing in the equity complex at CME, where for Q2, an 8.6 million ADV, which is up 13% year-over-year, June delivering 10.1 million contracts, up 54% year-over-year. If we look through where we are in July, about 7.8 million contracts per day, which is up about between 40%-50% versus July of 2025. It's clear that the market needs and wants more risk management and access to equities. Offering single stocks alongside the natural home of risk transfer and price discovery that we offer our equity index contracts makes a ton of sense. It's also worth noting that these Single Stock futures will be financially settled against the closing print of the name, which is a different innovation and different structure versus the prior product, making them not only more accessible to institutional and retail traders in the U.S., but makes it much more approachable and accessible to the global customer base of CME Group and easier to plug and play to all of our distribution partners across the globe. When you couple that with the near 24 access, Sunday night through Friday, of our traditional equity complex of CME Group, alongside the nearly $45 billion per capital savings per day that our equity complex delivers to the market, that is what we think is different about it right now, and that's why I think Terry is absolutely right, where timing matters, and we're optimistic about the timing of the market and the gravity of the complex at CME and look forward to the launch on Monday. Terry Duffy : Alex, it's such a good question, I don't want to work too long on it, Julie, I do think it's important because it's such a good question that we talk about the distribution and our partners. Julie Winkler : Our retail brokers globally are extremely excited about this new product innovation. They are seeing it as the single biggest retail growth catalyst of the year. This is something we've been working on for some time. We've been working with them and see them very actively in testing this within their systems. This product is a very straightforward way for both single stock and single stock options traders to add futures to their trading portfolios. We believe this is going to continue to introduce a broader retail audience and attract them to CME Group markets. With the 22 biggest names, those are certainly going to be very appealing to retail traders. We have over 35 retail partners that are targeting their readiness for day one, week one activity. We do believe this is going to build over time, we feel very good about the retail brokers as well as the liquidity providers that we have ready to go for Monday. Terry Duffy : Thanks, Jill. Thanks, Tim. Alex, thank you. That was a very good question. We appreciate the opportunity to explain that. Tim McCourt : Great. Thanks, guys. Operator : Next question is from Ben Budish with Barclays. Your line is open. Ben Budish : Hi. Good morning, and thanks for taking the question. I wonder if you could unpack the strength in market data growth this quarter. Even better than last quarter, looked like a pretty big sequential step up again. You called out pricing, which I think went into effect in January. You called out new products. I assume there's some new broker partners and things like that. Just curious if you could unpack that a little bit and how should we think about the next couple of quarters, given we have the pricing, but what else to think through in the near term? Thanks. Terry Duffy : Thanks, Ben. Great question. Jewel? Julie Winkler : Yeah. Certainly this has been our Q2 was again, a very strong in the quarter on record, $238 million in revenue. We saw an increase of 20%, as Lynne pointed out earlier. This was a 6.2% sequential growth over last quarter. It's really coming down to a few main factors. The price increase that you mentioned. A lot of other things as well. We saw strong growth of 3.5% quarter-on-quarter growth for our professional subscribers. This is just reinforcing the points that we've made throughout this call of having access to such a wide array of benchmarks. This real-time data is extremely important, and that is happening across all of our asset classes. We've seen continued revenue expansion in our derived data business. That team is working through the sales pipeline, there is also a variable component of many of these agreements, which is going to drive additional revenue as other performance-based measures kick in. As we discussed a bit with you last quarter, these performance-based simulation trading device accounts are really starting to grow rather significantly. Those were up 56% year-over-year. Really what these simulated trading environments are doing is they are acting as an incubator for both our market data business as well as our transaction-based retail business. What we see is a robust pipeline of traders that graduate from these simulation environments after they get education, after they get exposure of how to trade, and they then become professional data subscribers in their own right. It is really a great catalyst for that type of revenue growth. Lynne Fitzpatrick : Additionally, it is just worth noting, this quarter included approximately $7 million in audits and catch-up payments for prior periods. That was compared to $3.8 million in Q1. These are non-recurring, so we expect those payments are going to fluctuate quarter-over-quarter. I would say, this performance is not a single tailwind, but a deliberate part of our multi-pronged strategy, really across the data offerings, building demand, and expanding that use also of our benchmark pricing with things like Term SOFR. Terry Duffy : Thanks, Jules. Ben Budish : Okay, great. Thank you. Terry Duffy : Thank you. Operator : Next question is from Michael Cyprys with Morgan Stanley. Your line is open. Michael Cyprys : Great. Thank you. Good morning. Just a question on prediction markets. I was hoping you could update us on the traction that you're seeing, particularly outside of sports, and if you could talk to some of the steps that you're taking to drive greater engagement and connectivity, what's on the product roadmap, and more broadly, can you speak to the market data opportunity ahead with prediction markets? Thanks. Terry Duffy : Thanks, Mike. Prediction markets, interesting. There seems to be a lot of activity. I want to ask Lynne to talk a little bit about how the revenue kicks out on top of those and the way they are structured. We'll try to keep the sports out of it because I've been pretty public about this. A lot of these prediction markets on sports are gambling, and I think that that is going to find its way to the Supreme Court, and that is not something that we want to be a part of participating in right now. As I said earlier, I think a lot of these contracts are susceptible to manipulation when they list some of these small parlays and things of that nature, and those are not markets. Those are gambling. We'll talk more about the predictions on economic outcomes and things of that nature and give you some stats on how we've broken some of those out, and we can give you those. Lynne Fitzpatrick : Thanks, Mike, for the question. A couple of points there. If you look since launch, we've done about 525 million event contracts. That includes about 48 million contracts related to market events, about 9% of the total. That does tend to fluctuate depending on what is going on in the markets themselves. Things like large events like the World Cup, you tend to see a bit of a shift. As Terry mentioned, our product set is much more narrow than some of what you might see on some of these other platforms, and that is intentional because we want to be very careful with what we are putting out for trade to make sure that it meets all the requirements that we see from our regulator. A couple other points I would note. We had over 140,000 accounts that were trading event contracts this quarter. That was up about 13% from last quarter. We also saw some good growth in the average daily volume traded. We are up over 4 million a day. That was up about 40% versus what we saw in Q1. I can let Tim add a little bit more there. I guess one thing before I do, the market data question, I think that's still a bit of a ways off in terms of monetizing anything related to these markets, given the level of volume. We'd want to see that really have a lot more seasoning before we would start talking about that. Terry Duffy : Tim? Lynne Fitzpatrick : Tim. Tim McCourt : Thanks, Lynn. I think just maybe one thing to add is, as we continue to see sort of consecutive months of growth in our ADV in the totality of the complex, that we are also pleased to see when we are seeing some of these major events happening, like the World Cup that Lynn mentioned, that on some of those days, we are seeing our markets volume participate alongside upwards of 20% of the volume that we're seeing. It just reinforces this hypothesis of getting these traders into our market and continuing to work to attract the next generation of traders. We're pleased to see that we're seeing balanced growth, both in terms of the markets as well as the sports. We're very pleased with the progress we've made. Terry Duffy : Mike, appreciate the question. Michael Cyprys : Thank you. Terry Duffy : Thank you. Operator : The next question in the queue is from Bill Katz with TD Cowen. Your line is open. Bill Katz : Great. Thank you very much for taking the question. Just a two-parter from me. Lynne, congratulations on the promotion. I know it's a little bit ways off yet. I'm wondering if you could maybe talk early views of strategically, what are the top two or three priorities as you're ready for the new role? Then, Terry, just sort of curious, where do you stand in terms of timeline, you think, on the case with the CFTC? Which district do you think might have an opportunity to take a look at this? Any timing on the milestones or pacing would be very helpful. Thank you. Terry Duffy : Yeah. Thanks, Bill. I appreciate you reaching out and congratulating Lynne because that's the right thing to do. Lynne, tell us all about your strategic vision so we can all have it going forward since you've been working on that. Lynne Fitzpatrick : Yes. Well, thank you, Bill. I appreciate it. I guess what I would say in terms of the strategy is, as you know, I've been with the firm for about 20 years now, a long time. During my time here, I have been involved in kind of all of the strategic side of the business. The M&A transactions, the partnerships we've done over time, working very closely with Terry and the team as we've looked at those. I would say, my vision for the firm is not a strong departure from what we've delivered over the course of the last 20 years. I think we have done well in terms of staying with what we are good at, really running kind of the world-class exchange that we do, looking for ways to bring on more product, bring on more customers, and create more capital efficiencies for those clients. My focus is going to be to continue that, build on what we have, and continue that momentum to make sure we're delivering for those clients. I wouldn't expect a large-scale departure in that way going forward. Then Terry. Terry Duffy : Thanks, Bill. Thanks, Lynne, for keeping us on update. Bill, on the CFTC and the litigation, it is just the end of the process. What we filed, the agency has 60 days in order to respond to that filing. That will come about in August, and then I believe they have the ability to push it a little further before anything else can happen. That's just when you are in litigation with the government agency, there's a timeline associated with it. It's not like a traditional suit against another party for a car accident or something. You have to go through a process with the government, and again, it's 60 days, then again, that can be continued. There has been a judge assigned to the case, that will move forward. I think we'll know more at the end of August as it relates to what the CFTC's response is to the court to our case. Then we'll have more to report out. Right now, that's the process that we are aware of to date, Bill, and we don't have much more information than that. Wish we did, but that's just the process that happens when you go with the government. Operator : The next question in the queue is from Simon Clinch with Rothschild & Redburn. Your line is open. Simon Clinch : Hi, everyone. Thanks for taking my question. Apologies, I'm going to bring it back to perpetual futures again, Terry. I was just curious, Terry, the market is really focused on the competitive threat to derivatives franchises from perpetual futures. I'm interested in your perspective of whether you see any actual adjacent opportunities or symbiotic opportunities between listed futures and perpetual futures in the long run, should they become a more substantial market for speculative retail. Thanks. Terry Duffy : Interesting question, my friend Simon, because I do. I do see opportunities. As people continue to introduce these products that I believe are swaps, and when they're classified as swaps, as you know, Simon, swaps need to be margined for five days. You need to become a swap dealer. This is not something a retail participant is prepared to do. We talked about how retail participants' activity normally is, but I also think it lends to an opportunity for them to be looking at our markets and our retail products as it goes forward. Some of these entities that are listing some of these products, whether they're perps or other type of products on retail, I think directly or indirectly could benefit CME greatly as time continues to move forward. Again, it's like an incubator system that I'm not paying for, and they are. We are working our retail business like we have in a very judicious, educational way to make sure we have sustainable clients going forward. There's other people that I would suggest that maybe are not doing the same, some are, that could potentially be a part of CME Group going forward. I'm a big believer that large commercial institutions drive the marketplace. They drive the price discovery function, and then it trickles down from there, and other participants will participate in those products. The question is at what size meets their needs. We have shown that we have done and catered to the institution by taking, and I mentioned this earlier, an S&P 500 from the year 2001 or 2002 to a multiple of 250 to an E-mini to a micro to something smaller than that to meet the needs of different participants. I think that some of these new online offerings could feed right into the growth of CME's retail business with the products that we have and the cohort of institutions that we have, the 130 million open positions that we have today, the $95 billion of efficiencies that that 130 million open interest receives on a daily basis. That's very attractive. Now the question is: Can we create smaller products of those products for the institutions to trade that are potentially trading at another venue right now in an incubator-type system? I work with some of our retail partners today, and I will mention a few, NinjaTrader being one of them, Topstep being another. These are people that are very committed to bringing their client base into CME in the right way, the right form. There are many others that maybe shouldn't have called out too because there's multiples, but I happen to meet with both of those recently, so they're top of mind. They are looking at new ways on how to bring their client base into our retail products. To me, that's very exciting. I look at the competition and the landscape of this world as it relates to retail, and I can actually see a benefit of them coming into our markets ultimately. Simon Clinch : That's great. Thanks, Terry. Appreciate it. Terry Duffy : Thanks, Simon. Operator : We'll take our last question from Ashish Sabadra with RBC Capital Markets. Your line is open. Will Qi : Hey, good morning, guys. This is Will Qi on for Ashish Sabadra. Appreciate you guys squeezing us in. Maybe just a question more on market data and the trends there. With the growing usage of Gen AI and generative tools within financial market participants, have you seen that as a meaningful demand driver for CME's data solutions? Just around those factors. Thanks. Terry Duffy : Good question, Will. Thank you very much. Jill? Julie Winkler : Yeah, I would say it's still relatively early days of trying to both think about what is coming next with the data. The primary means of which we distribute our data today is certainly from a real-time basis and through a market data channel. Again, the way that consumption is happening in the future, it's changing. We have been actively in this space, also working on our policies as well to ensure that we are going to meet people where they're going to be consuming data in the future, as well as continuing to offer the feeds that we do today. Again, I think a lot of it is we've got a lot of very valuable intellectual property, and we want to make sure that we continue to protect that. As we've demonstrated, we are in a great period of growth, it's both a defend as well as a grow mentality that we have to take with that. Terry Duffy : Thanks, Joel. Thanks, Will. Will Qi : Thank you, guys. Operator : The next question in the queue is from Michael Cyprys of Morgan Stanley. Your line is open. Michael Cyprys : Oh, thanks so much for taking the follow-up. Just coming back to this perp discussion, if you step back from it for a moment, one of the broader trends across crypto and prediction markets is this move toward more vertically integrated direct-to-customer marketplaces, with firms owning both the customer relationship as well as the trading venue. I guess, how do you see this as a competitive threat to CME here or maybe even longer term? Talk about how you're thinking and approaching that, some of the steps you might take. I know you do have your own FCM that you've started to use on the prediction market side. Just curious how you're thinking about that and as market structures continue to evolve. Terry Duffy : Yeah. Mike, that's a great question. I think when you talk about vertically integrated, That's basically the same as talking about disintermediation of participants in the marketplace today. We have a whole list of FCMs. We've got our own FCM, which we do not compete with our existing FCMs on. We believe in that model. We think that that is a good marketplace. I also believe in a neutral facilitator of risk management, which is critically important, and that's what CME provides today. We don't participate in the markets. I think that lends to the credibility of all participants, whether it's the smallest of sorts or retail participants to the largest institutional traders. When they start to look at vertically integrated entities that are maybe participating in the market, managing that risk and doing other things on behalf of the client, there could be a bit of, I don't want to say confusion, but people might be a little concerned about conflicts, is the word I guess I was looking for. I'm not suggesting there would be, but the appearance of conflicts could be there. I think that participants are savvy today. They're smart today. I think that they're looking for efficiencies that is being proven by our offering today. I think when you look at vertically integrated institutions, you have to see what is vertically integrated. If it is the food chain of creating efficiencies for marketplace, yes, I think that continues. If it is participation in the markets in of itself, I think that lends to certain credibility issues for that entity. That is kind of how I look at it from a risk perspective. Maybe Suzanne, do you want to comment at all how that could potentially have an effect or no? Suzanne Sprague : No, I think that covers it. Terry Duffy : Okay. I don't know if anybody else has anything to reference on that. Mike, I hear what you are saying, and there might be a day where that happens with CME too, right? That is the reason why when I put forward that we are going to have our own FCM a couple of years ago, it was due to, as you recall at the time, FTX and what they were trying to accomplish. I was not going to be unprepared for whatever the scenario may or may not be in the future to have a structure in place for CME to compete in the world that you outlined. I assure you, I don't want to be a leader in that, but I will be prepared for that. Michael Cyprys : Great. Thanks so much. Terry Duffy : Thanks, Mike. Appreciate it. Operator : Showing no further questions, I will now hand the call back over to management. Terry Duffy : Before we wrap up, we talked about a lot of different things here today, but one of the largest asset classes we have is rates. We are continuing to create efficiencies. I just want to touch real quick, because the question didn't come up on it, and I thought it should, is on the Treasury Link. Mike, could you just give a quick explanation on how that's going to work and the benefits for our clients? Mike Dennis : Sure. Thanks, Terry. Appreciate you calling out Treasury Link. We're excited to announce Treasury Link. It's really an industry-first Treasury functionality that will enable transparent, centralized spread trading between Treasury futures and BrokerTec cash Treasuries on CME Globex. We're leveraging proven FX Link technology. It's expected to launch in Q4 2026. This new offering connects the two leading U.S. Treasury liquidity pools, bringing unique innovation by enabling atomic execution of cash for future spread transactions and eliminating lagging risk in the process. The team and I have been out in front of clients, and we see strong demand from both existing and prospective new participants who are interested in realizing execution efficiencies between cash and futures. Notably, the lag of various relative value trades takes place away from BrokerTec, and this offering will be highly complementary to the existing BrokerTec liquidity and expansive to total BrokerTec trading activity. Treasury Link really represents the next stage in our initiative to bring our cash and futures markets closer together, delivering unique efficiencies while enhancing liquidity and price discovery for the broader U.S. Treasury market. It's really an evolving time in the Treasury landscape. We have a new Fed chair who is committed to overhauling their communication style. We continue to see record debt levels in this country, and we will see the Treasury and repo clearing mandate phased in over the next year. Treasury Link is just another example of how CME Group continues to innovate and deliver efficiencies for our clients alongside the $27 billion a day in margin savings across futures options, swaps, and cash. We're very excited to announce Treasury Link, and I appreciate, Terry, you calling it out. Terry Duffy : Thanks, Mike. I appreciate the explanation. It is important. I know we get caught up a little bit on soup du jour. I want to thank everybody on this call. This gave us an opportunity to hopefully set the record straight on where our business is at, where we feel from a competitive standpoint, and what exactly are the products that are supposedly competing with our core business and what our core business looks like today. I can't thank each and every one of you enough for your very pointed questions, and I think they were all great. We are excited about the new offerings we have going forward. We're excited about the new cohorts and clients that'll be coming into our marketplace. I think that when you look at the $95 billion of efficiencies, when you look at what we are accomplishing here, the 94% of our trade being institutional, and how we think that could add and grow to our retail business down the road and do it in a thoughtful, educational way that is sustainable for a long time to come. We appreciate your questions, and we wish you a good day, and thank you very much for your interest in CME Group. Thank you. Operator : This concludes today's call. Thank you for your participation. You may disconnect at this time.